Exide Industries Ltd. is Evolving its Playbook from Lead-Acid to a Lithium-ion Battery Major Company of the Future

Exide is a mid-cap company with a market cap of 37625 Cr. The company offers a diversified product portfolio, with batteries from 2.5Ah to 20,200Ah. Exide manufactures batteries for 2W, 3W, 4W as well as rickshaws and serves industries such as telecom, railways, power projects, traction, data centers etc.

Key Points for the business of Exide -

- The major portion of the funds with the company are deployed in the investing activities of the cash flow statement and the plants operating at maximum capacity. These points show that the company is currently in the expansionary stage with the vision of high growth as the sector takes off in the coming times.

- The lead-acid market is expected to continue growing steadily at a CAGR of ~7% over the next 5 years.

- The demand for Lithium-ion capacity by FY2030 is expected to reach 140-150 GWh, given the rising demand of EV and energy storage from the current levels of 20 GWh

- Data center sector is expected to grow at a CAGR of ~20% over the span of next 4-5 years, which requires vast amount of reliable power backup solutions.

Growth Frontiers-

1. Investment = Rs. 48.02 Bn in lithium-ion cell manufacturing project, still in its early stage with sampling and product trials in line. The current market size of Lithium-ion Battery sector is USD 136.28 Billion, which is expected to grow at a CAGR of 21.90% to a market size of 366.82 Bn USD by 2031.

2. Highest value driver and fastest growth part of the business is its solar vertical growing in double digits. The solar segment is currently at a market volume of 145.83 GW, which is expected to yield a growth of 19.05% to a market value of 348.57 GW by FY2031.

3. Growth in BESS - The demand for Battery Energy Storage System (BESS) in India currently valued at USD 2.05 Bn is expected to undergo vast growth at 33.20% CAGR to make up a value of 8.59 billion USD by FY2031.

Risk Frontiers -

1. The raw materials required comprising of Lithium-ion Battery Materials (Cathode Materials, Lithium iron Phosphate (LFP), Lithium Cobalt Oxide (LCO), Lithium Nickel Manganese Cobalt (NMC), Lithium Nickel Cobalt Aluminum (NCA), Lithium Manganese Oxide (LMO)}, Anode Materials, Electrolyte Materials, Lead Acid Battery Materials, are expected to grow at CAGR of 12% over the period of FY2026-FY2031, mapped with the projected spikes in demand for them.

2. The company must keep updating advancements in its technology to sustain operations and in order to keep material costs and labor costs subdued.

Overall, the company has positive prospects for its business over the next 5 years in a sector that is under major evolution, transforming into clean energy in the coming times. I believe that Exide Industries is in a better position that its competitors in leveraging its expertise and investments to drive the next leg of growth.